Brendan Barber, TUC general secretary, said regional differences in the cost of housing had lead to labour shortages and disillusioned workers. “Housing can have a huge impact on an individual’s working life and how productive they are once they go to work,” he said.

“The high price of housing has forced many employees to live miles from their jobs, others are crowded into sub-standard accommodation and have given up all hope of ever reaching the top of the social housing list,” Barber said.

“Similarly, workers living in poor housing are more likely to suffer from ill-health, and are likely to be less productive at work. It’s a problem the UK economy cannot afford to ignore.”

The report warned that unless ministers introduced measures to assist the thousands of people who borrow beyond their means, repossessions would become a serious problem and might returning to 1990s levels – when more than 100,000 householders a year were forced to hand over their homes to mortgage lenders.